Mr. Sean O'Keefe
Deputy Director
Office of Management and Budget
Executive Office of the President
Washington, D.C. 20503

Dear Mr. O'Keefe:

In accordance with the Federal Activities Inventory Reform Act (P.L. 105-270), the FY 2001 Commercial Activities Inventory for the National Science Foundation (NSF) is attached. We have followed the guidance provided in your April 3, 2001, memorandum in preparing this report.

In addition to the traditional FAIR Act inventory that lists commercial functions we have also attached a list that provides comparable information for the inherently governmental positions within NSF.

To compile the 2001 Inventory, we utilized a process similar to last year. Agency positions were initially screened to identify those clearly performing Federal functions (e.g., supervisors, contract oversight, financial commitment). The remaining positions were then individually analyzed, and coded or exempted as appropriate.

Last year's Inventory resulted in one challenge. We addressed each of the issues raised in the Challenge, and concluded that no change was warranted. The decision was not appealed.

NSF has traditionally utilized the private sector extensively to achieve its mission, and we will continue to do so in the future as warranted. Nearly 1,400 contractor FTE's and an additional 100 IPA FTE's are currently utilized annually.

Within NSF, we have initiated an extensive workforce analysis that we will use to help address several of the Administration's management initiatives and performance goals, including expanding A-76 competitions. In addition, as part of the FY 2003 budget process, we are developing a 5-year Management Plan that will also facilitate our efforts to address the Administration's initiatives and goals.

We are supportive of the Administration's desire to make agency Inventories more accurate, as well as recent overtures/requests to more clearly define inherently governmental functions. While our 2001 Inventory lists functions that are potentially commercial we are concerned that in a small agency such as ours a basic cadre of professional and administrative employees is required to effectively achieve the agency's mission. Given our extensive use of contractors to date, we may already be approaching the saturation point. We believe that the Administration's numeric goals should take into consideration the privatization efforts agencies such as ours have already achieved.

The agency point of contact for the inventory and this report is Gary E. Scavongelli, Staff Associate, Office of Information and Resource Management. Mr. Scavongelli may be reached at (703) 292-8102 or on email at gscavong@nsf.gov.

Sincerely,

Rita R. Colwell
Director

Enclosure